revisionary trust

Revisionary trust

Revisionary Trust

An irrevocable trust that becomes a revocable trust after a certain number of years. An irrevocable trust is one where the grantor forfeits his/her ability to dissolve the trust and to reclaim the assets placed in it, while a revocable trust is one where the grantor retains these rights. If the grantor dies while the trust is irrevocable, the trust is not considered part of his/her estate for estate tax and inheritance tax purposes. On the other hand, if the grantor is still living when the trust become revocable, the assets can be considered part of the estate, but at the same time the grantor may revoke the trust and use the assets if he/she runs into financial difficulty or for any other reason.

revisionary trust

A trust that is irrevocable for a predetermined period (at least ten years or until the death of the beneficiary), after which it becomes revocable. During the time the trust is irrevocable it will not be included as part of the donor's estate for tax purposes.

Tools like guaranteed income annuities, longevity insurance, long-term care insurance, hybrid policies, revocable living trusts and RMD withdrawal strategies are too often ignored in favor of accumulation-focused methods that are much more comfortable to advisors.

Scharlacken joined Cohen & Grigsby, having come from another Naples-area law firm where she was a partner specializing in complex estate planning matters, ranging from revocable living trusts, to private family foundations and family limited partnerships.

Often, however, attorneys have drafted wills or revocable living trusts for couples with formula provisions that, due to the estate tax repeal, may cause the decedent's estate to be distributed entirely to a trust that will benefit the spouse and the decedent's children.

Principal's most commonly created trusts are rabbi trusts--in which an employer is responsible for the current taxes generated by the trust--in the business setting, followed by irrevocable life insurance trusts and revocable living trusts.

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